Bi-Weekly "Metapolitics"­ Discussion in Fishtown

Saturday, January 7, 2017

This discussion will cover one of the most commonly used tools for comparing economic policies in various countries, the Heritage Foundation's "Index of Economic Freedom". The Heritage Foundation is a conservative think tank based in Washington, DC, and they formed the intellectual backbone of the GOP since the "Reagan Revolution" of the 1980s. The Heritage Foundation promotes a brand of fiscal conservatism that could perhaps best be described domestically as "neoliberalism", which is similar but slightly to the right of the economic policies pushed by Bill Clinton's "New Democrats" in the 1990s and the "Third Way" of the UK's New Labour party under Tony Blair. Internationally, in terms of development economics & trade policy, the Heritage Foundation can be thought of as the center-right arm of the economic ideology known as the "Washington Consensus."

The Heritage Foundation's members are conservative intellectuals & policy wonks and although they may seem "far right" to some pundits on the political left, its members are hardly akin to the fire-breathing "culture warriors" of Fox News & right-wing talk radio or to the radical "anarcho-capitalist" libertarians who think taxation is theft and want to abolish all government. Bill Clinton's welfare reform and the "individual mandate" for health insurance eventually employed by both Romneycare & Obamacare both started as ideas hatched at the Heritage Foundation.

The "Index of Economic Freedom" is popular with both establishment conservative pundits at National Review and Beltway libertarians at Reason Magazine, and you can predictably find op-eds at both publications whenever the US slips in the Index's ranking (we're currently #11, just below the UK and just above Denmark).

In addition to looking at the Index and learning how it defines & measures "economic freedom," we'll look at critiques of the Index by 5 people: Stefan Karlson of the Ludwig von Mises Institute (a paleo-libertarian), Kevin Carson of the Center for a Stateless Society (a radical, left-market anarchist), Will Wilkinson of the Niskanen Center (a pro-market, left-libertarian), Michael Lind of New America (a center-left, pro-business liberal), and John Miller of Wheaton College (a progressive who's highly critical of income inequality & globalization).

Each of the ten economic freedoms within these categories is graded on a scale of 0 to 100. A country’s overall score is derived by averaging these ten economic freedoms, with equal weight being given to each.

HOW CAN SOCIAL DEMOCRACIES RANK AHEAD OF THE U.S. IN "ECONOMIC FREEDOM"?

Both liberals & conservatives (and libertarians) are often shocked to see Western social democracies ranked ahead of the US on a right-wing think tank's "Index of Economic Freedom". After all, isn't the US the most "capitalist" society on Earth? The short answer is no, that's an oversimplification due to a nebulous definition of "capitalism". Capitalism technically just means "private ownership of the means of production" but it gets conflated with laissez-faire policies like the free market, free enterprise & free trade, or with fiscal austerity & privatization of social services, or with various negative phenomena like kleptocracy, cronyism, high income inequality, and high market concentration (i.e. oligopolies). These are all different things and not always positively correlated - some are even negatively correlated (like laissez faire policies that promote competition & oligopolies)

The seemingly paradoxical result of social democracies that are more "capitalist" or more "free market" than the US is due to the fact that people overlook that the Index has 10 factors, and so countries that rank low in "fiscal freedom" due to high taxes and "government spending" due to high spending on social programs can still make up for it with high levels of freedom in the other categories. And many people don't realize that the US doesn't do very well on these other 8 factors.

Many of the social democracies with generous welfare states went through a period of neoliberal reforms in the late 1980s & early 1990s because of a period of prolonged economic stagnation in the 1970s & '80s. While they still have high taxes & high government spending on social programs and in many cases have more regulation on their labor market than the US, the Anglo & Nordic social democracies beat the US in the other 7 factors measured by the Index and thus end up ahead or not too far behind.

If you want more info on how these neoliberal reforms played out in various social democracies, here's some articles that describe what went on in New Zealand, Sweden, Canada and Australia. The first 2 article are from libertarian sites that regard these neoliberal reforms as very good, whereas the latter 2 articles are from left-wing sites that consider neoliberalism to be very bad:

* NOTE: I don't want to get caught up in discussing the 4 articles above, but I wanted to have a basic idea of why social democracies can rank about even or ahead of the US in Heritage's definition of overall "economic freedom".

CRITIQUES OF HERITAGE'S DEFINITION OF "ECONOMIC FREEDOM" AND THEIR INDEX:

This is a meetup group for people in the Philadelphia area who are passionately interested in the public policy implications of the latest findings in social & economic research, but who also feel that the prevailing liberal-vs-conservative political paradigm is unnecessarily limiting.

Many people have found that the more you know about a subject, the more you realize the extent of what you do not know - and so it goes with politics, economics and social theory. When we delve deep into the latest social science research, the picture we get of our world is a series of highly complex interlocking political, social, economic & technological systems. We have to seriously face the likelihood that a perfect political ideology is impossible, and that the best we can do is to try to push public debate in a less polarized & more rational direction, and focus on strategies for living in a world we don't fully understand. The alternative would be to deny the uncertainties and shoehorn the facts into the standard "liberal" or "conservative" worldview we grew up with.

The purpose of "Political Agnosticism" is to avoid approaching politics as a clash of "secular religions" or as a "culture war". Instead, we acknowledge uncertainty and tradeoffs on policy issues, and try to construct more rational methods for thinking about & discussing political issues. This is basically what a lot of the skeptic & atheist movement is doing with traditional religion & morality, but we're just extending our skepticism to the "political religions" represented by the major political parties.

(1) We try to understand why people are predisposed by both inherent psychological traits and cultural upbringing to have certain political views. Typically, we use a mix of the Five Factor Model, Jonathan Haidt's "Moral Foundations Theory", Geert Hofstede's "Cultural Dimensions Theory", Bryan Caplan's concept of "rational irrationality," Dan Kahan's "cultural cognition" model, and Daniel Kahneman's work on cognitive biases.

(2) We try to educate member on both the fundamentals and the latest findings in the social sciences - especially political science, social psychology, public choice theory, behavioral economics, and game theory - and we discuss how they relate to current events & trending political topics. Aside from looking at academic research, a lot of our reading material comes from the rationalist forums & skeptic blogosphere (Less Wrong, Slate Star Codex, Overcoming Bias, Omnilibrium, Ribbonfarm, Rationally Speaking, Sam Harris), data journalism sites (Pew Research, FiveThirtyEight, Freakonomics, NYT's Upshot, Vox, RealClearPolitics), and today's major public intellectuals and highbrow media pundits from across the political spectrum (basically anyone writing in The Atlantic, New York Times, NY Magazine, NPR, Slate, Washington Post, Salon, Guardian, National Review, The American Conservative, Reason, TED Talks, Edge.org).

(3) We try to imagine alternative types of political & economic systems that could provide better outcomes for the future based on both theory & empirical data. This often involves connecting ideas & strategies from various points on the traditional political spectrum and analyzing political philosophies that could be described as syncretic, contrarian or radical centrist. We'll look at things like organizational change, urban design, social innovation, the impact of new technologies & disruptive innovations, new forms of governance, and various alternative economic models.

If you're dying to discuss social psychology, sociology, economics & political theory but don't quite feel a sense of belonging with the typical political activist meetups in our area, come out and enjoy some spirited discussion with the Philadelphia Political Agnostics!